Change is not a term widely used in connection with McDermott Will & Emery (MWE). But with Andrew Vergunst about to take on the top London job, as well as a new global strategy, the firm could be set for a turnaround.
Many onlookers say that one of MWE’s main challenges in the City has been its ability to show that “it’s not still where it was just a few years ago”. The Chicago-headquartered firm opened its London branch in 1998, with the US emphasis on private client also making its way over to the UK. The majority of MWE’s work still comes from a variety of privately-owned businesses and the firm is able to handle everything from their corporate and personal tax matters, as well as business restructuring and M&A.
But what else? In 2008, the firm brought in Lovells corporate finance head Hugh Nineham to lead the office’s efforts in the City but still ex-partners seem unconvinced that any change has happened since.
“Hugh was lovely, but he never led the firm anywhere,” said one source. “With Andrew, I’m not sure if he will lead the firm anywhere. I think it will go on as it was.”
Yet MWE’s City office does look to be entering its next phase. With Nineham announcing his retirement earlier this year, the board elected private client partner Andrew Vergunst to take the helm. Nineham and Vergunst joined MWE at more or less the same time, with Vergunst arriving from Maitland after an 11-year career. The decision reflects MWE’s overall private client focus, although Vergunst is keen to stress the importance of corporate as the firm evolves in London.
“To be a big international firm you need to have a big private client presence in London and this has been a huge success for us,” says Vergunst. “But the corporate practice has also grown and we’re now looking at the next stage in terms of M&A transactions. I’d like to see expansion into different areas here.”
The focus all forms part of the firm’s new global strategy for the next five years, announced alongside its 1 per cent revenue drop to $891.5m and 3.3 per cent increase in average profit per equity partner.
One of the aims is to put corporate right at the forefront of MWE’s strategy, so that it better complements its private client offering. The firm is also keen to build on its corporate advisory practices worldwide, such as intellectual property, finance, life sciences and health advisory, with the latter remaining a key brand in the US though not in the UK. It could, however, be an area to bear fruit in the UK, with one source pointing towards the increase of private health in the UK in terms of private hospitals and medical services.
“We need to identify areas that are strategically important to London and the firm as a whole,” Vergunst says. “We want to be well positioned for the next phase of growth, recognising the strengths we have over in the US and to be able to build on these platforms.”
In his new role, Vergunst will be working with corporate head Mark Davis to drive the strategy in the City forward, while he continues to build on his own private client practice, which he describes as “not quite the finished article”.
“There are lots of good private client practices in London, but what distinguishes us is the international nature of it,” he says. “We have an eclectic mix of nationalities working for us, such as British, South African, Canadian and Israeli, and we’re looking to grow our practice so we’re not just seen as transatlantic.”
Vergunst himself is South African, advising wealthy families and individuals on their tax, trust and migration planning in relation to the UK, the US and South Africa. He has been described by his former colleagues as “dynamic”, “youthful” and “with gravitas”, and as someone who will bring lots of “energy, enthusiasm and commitment” to the role.
But there are challenges he will have to deal with. One source said MWE’s compensation structure is an issue, meaning “one person can claim the credit for all the billing and are therefore not interested in selling their clients to other partners worldwide”. One reason given for this is the “American culture” of the firm, with Vergunst therefore needing to handle London morale amid US influence.
“He’s got to be prepared to build the London office in general,” says one ex-partner. “It’s a thankless task, as the US don’t understand, and we’ll have to see whether Vergunst has the commitment or desire to pull it off.”
Vergunst disagrees about the influence of the US over London, claiming the “firm has reaffirmed that London is important”, despite promoting no London partners this year.
“London is a congested market and this could be seen as a threat,” he concedes. “But I don’t see it that way. The better we all are, the more work comes to London and we’re presented with these opportunities.”
With the firm poised to put its new global strategy into action, it may just be the right time for Vergunst to move MWE’s London office forward.